Count Crimes Committed in Oily Gulf of Mexico: Ann Woolner

May 26 (Bloomberg) -- At least one federal crime had
indisputably been committed when oil started spewing into the
Gulf of Mexico and approached land. Another criminal act became
clear when the first oil-covered sea bird died.

Even if everyone involved in the Deepwater Horizon disaster
did precisely what they were supposed to do, if every crew
member, each manager and all suppliers followed every regulation
diligently, the oil globs reaching shore and the deadly crude
covering pelicans signal crimes just as clearly as would a body
with a dagger through the heart.

“Someone’s going to be criminally prosecuted for this,”
says David M. Uhlmann, who for 17 years worked as a prosecutor
for the Justice Department’s environmental crimes section,
including seven years as the unit’s chief.

The questions are: who, and for what crimes?

BP Plc tops the list of suspects because the company leased
the rig, owns the oil and to some degree oversaw the operation.
But Transocean Ltd., which owns the rig and supplied most of the
staff, no doubt has its lawyers working defensively right about
now. And then there’s Halliburton Co., which cemented the well.

As for laws that were clearly broken, there are two that
let prosecutors slam-dunk convictions with no evidence of
negligence or intentional wrongdoing. Many a white-collar case
has floundered on the problem of proving criminal intent. These
environmental laws make that unnecessary.

Environmental Statutes

OK, they are both misdemeanors punishable by minor fines,
but stay with me here.

Even a misdemeanor conviction would remove the $75 million
cap on damages that the Oil Pollution Act sets. BP says it will
pay all legitimate damages from the spill, regardless of the
cap, but fisherman still suffering from the Exxon Valdez spill
20 years ago would urge caution in believing such promises.

Bumping it up a notch by showing negligence, prosecutors
can win a conviction under the Clean Water Act, and there’s
every reason to believe that can be shown here. Negligence means
an absence of due care, say in keeping the blowout preventer
working to, um, prevent a catastrophic blowout, for example.

All right, a negligence conviction would be a misdemeanor,
too, but it carries a fine that could decimate any company
charged in this catastrophe: up to twice the damages the spill
caused. And an individual charged could spend a year in jail,
which would seem a lot for an oil-company manager.

Proving Felonies

To get into felony territory is trickier. For that,
prosecutors need to show that companies or people acted
“knowingly.”

Surely no one knew they would be wreaking ecological
devastation on the Gulf of Mexico, ruining a coastal fishing
industry, crippling tourism or trashing beachfront property
values when they were operating the Deepwater Horizon, even if
they took a shortcut or two.

That kind of knowledge doesn’t have to be proven to make a
felony case. A BP subsidiary admitted felonious guilt in a
deadly 2005 explosion at a Texas City, Texas, refinery and when
another BP operation spilled 200,000 barrels of oil into Prudhoe
Bay in Alaska.

Uhlmann, who now teaches law at the University of Michigan,
says that if sufficient evidence emerges, the government could
win felony convictions under the Clean Water Act by proving
those in charge knew the operation had serious problems and
continued to run it anyway.

Eyewitness Account

That seems the case laid out in a CBS “60 Minutes”
interview with Mike Williams, chief electronics technician on
the Deepwater Horizon.

He said that before the explosion, the rig’s blowout
preventer coughed up broken pieces of a crucial rubber seal. A
supervisor said it was no big deal.

And when a crew member’s error broke part of the blowout
device’s emergency backup system, no one much cared about that,
either, Williams told “60 Minutes.”

Then, when it came time to close the new well in
preparation for pumping, a BP manager demanded the crew use a
quicker, riskier way than the standard process the Transocean
manager had planned, according to Williams.

It could turn out that Williams’ account is flawed, or
that none of those problems led to the explosion, or that BP and
Transocean did everything they reasonably could to prevent the
11 deaths and thousands of barrels of still-spewing oil that’s
now coating wildlife and washing ashore on beaches and wetlands.

Legal Thresholds

But if someone filed a false report, manipulated a test
result or showed any attempt at deceit, that would ratchet up a
Clean Water case to a felony. It could also trigger prosecution
for fraud, obstructing justice or filing a false statement
against the individuals involved, as well as their employer.

In this case prosecutors will be driven to be as aggressive
as possible, says Uhlmann, given the gravity of what’s occurred
and previous convictions by BP subsidiaries, all of them
accompanied by promises to do better.

And yet, even the misdemeanor crimes we know were committed
led to a calamitous result. They could also lead to ruinous
penalties to those responsible.

(Ann Woolner is a Bloomberg News columnist. The opinions
expressed are her own.)